About Us

Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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October 29, 2010

Obama's climate solution: undermine green standards abroad?

As we document in a new memo, President Bush's Korea trade deal, and NAFTA-style agreements in general, are the most politically toxic policy since giving Viagra to convicted child molesters.(As Ezra Klein writes, the latter is unfortunately a campaign talking point for some candidates.)

As our day-after election report will show, candidates of both parties are campaigning against unfair trade and offshoring. This includes the few Democrats that could somehow beat the odds and have the party retain the House, or the likely GOP margin makers. And 110 House members, along with the AFL-CIO and Sierra Club, have called for fundamental changes to the Korea deal's harmful deregulatory provisions on financial services and investment.

Somehow, I don't think this is what they had in mind. Mark Drajem at Bloomberg reports that...

The U.S. is asking South Korea to accept American automobile safety and emissions standards in an effort to advance a free-trade agreement, according to three people briefed on the talks.

Under the proposal, if American-made automobiles meet U.S. regulatory standards, South Korea would have to permit the vehicles to be sold in that nation...

So, it's 2010. The glass is half-to-fully empty on environmental and financial regs here at home, thanks to watering down under industry and Senate pressure. The administration's solution should be to fill up the dang glasses, not try to break other countries' fuller ones through trade deals. We can only hope that this is a testing-the-waters kind of proposal, and that the Obama administration will commit to more robust reform prior to the G-20 in Seoul.

"This election season, hundreds of candidates across the country are campaigning on their opposition to jobs and tax dollars going overseas. This makes sense, given poll returns that show opposition to unfair trade practices is one of the few things that unite Americans of different incomes and political parties. But many of the politicians’ 30-second television ads do not explain why this offshoring is happening..."

October 27, 2010

Follow the Climate Reality Tour!

We’re pleased to unveil an exciting new project: the Climate Reality Tour.

You may have caught an earlier post, but in case you didn't, let's fill you in The Climate Reality Tour is a movement-building road trip to promote global economic policies that are fair for workers and shift away from the climate- and job-destroying status quo. The destination? The United Nations Climate Negotiations in Cancun in late November. And to bring home the sustainability point, we decided to go by bike. Yep, by bike!

With the world in the grips of overlapping global crises – food, economic/financial and climate – the stakes are high indeed. To save the planet requires confronting these crises simultaneously, and that means overcoming the false jobs vs. environment trade-off. In truth, corporations benefit from exploiting both while human beings and the earth suffer.

But this requires political will and resolve far beyond what we’ve seen from either political party, and even many leading civil society organizations. At Public Citizen, we’ve long believed our unsustainable global economic order, as etched in the tomes of the WTO and NAFTA-type trade deals, unfairly pits workers and ecosystems against one another. We’ve decried how the status quo sanctifies the rights or multinational corporations to exploit and destroy – even above the democratic rights of a people determine their own economic and eological futures.

October 21, 2010

Chamber of Commerce Pushes Offshoring

The folks at Think Progress have been following the breadcrumbs and connecting the dots on unfair trade policies and corporate influence in elections.

Think Progress reports on a program sponsored by the Chamber of Commerce, a corporate interest group, and the Chinese government that puts together workshops on how to offshore work to China. Given the Chamber’s attitude toward offshoring, perhaps we should have expected to find this type of program. As far back as 2004, Tom Donahue, CEO of the Chamber, said that “there are legitimate values in outsourcing - not only jobs, but work.”

This pro-offshoring attitude goes hand-in-hand with the Chamber’s push to approve the unfair Bush-negotiated Colombia, Korea, and Panama Free Trade Agreements (FTAs). Tom Donahue recently claimed that passage of these trade pacts will create millions of jobs, but in reality the FTAs will just make it easier for corporations to offshore jobs abroad. That’s the last thing we need in the middle of this jobs crisis.

Think Progress also reports on how foreign corporations that provide offshoring services have been funneling thousands of dollars to the Chamber of Commerce’s political ad account. The Chamber of Commerce has been using this political ad account to attack champions of fair trade policies this election cycle.

(Disclosure: Public Citizen has no preference among the candidates for office.)

G-20 Deadline for Korea FTA May Be Missed...Thankfully?

In an interview with Financial Times, South Korea’s trade minister, Kim Jong-hoon, said that he does not yet know the nature of the U.S.’s complaint about the FTA. In other words, the U.S. hasn’t made its “ask” of South Korea – the exact “fixes” the U.S. wants to make with the deal.

Mr. Kim went on to say, "As we say in Korean, if you tie up a rope, you are the one who will have to untie it." Well, Bush tied this rope – and it’s a political noose. So, the Obama administration had better be careful not to hang itself with it.

October 19, 2010

The Political Genius of Sarah Palin: How One Facebook Post Sparked a Mass GOP Fair Trade Wave

There is some conventional wisdom that the GOP is more united than Democrats in favor of unfair trade deals. See for instance this ridiculous aside from the White House in the New York Times Magazine this weekend:

Rouse and Messina see areas for possible bipartisan agreement, like reauthorizing the nation’s education laws to include reform measures favored by centrists and conservatives, passing long-pending trade pacts and possibly even producing scaled-back energy legislation.

This is silly. Polls show that GOP and independent voters are at least as opposed to these deals as the Democratic base. (See here and here.) And, nowhere in the "everything and the kitchen sink" 48 page GOP "Pledge to America" unity document do they talk about trade or offshoring - showing that there is not a heckuva lot of GOP unity in support of unfair trade.

GOP candidates are responding to the public support for fairer trade. This cycle, we're seeing a much higher number of GOP running on fair trade than in the last two cycles, including pledging to renegotiate trade deals and end tax loopholes for companies that offshore jobs. Some are even attacking their Democratic incumbents' votes against fair trade (a vote for China PNTR, for instance).

But the message that I have seen probably 100 GOP candidates run on in this cycle is attacking the incumbent Democrat for voting for a stimulus bill with Buy America provisions criticized as weak.

In another corner, we have the fair traders and economic justice types - who wanted to pass a stimulus bill, and one with strong Buy America provisions. The price imposed by the trade point people on the Hill and the administration was to ensure that countries we've signed trade deals with would be treated as if they were "American" for the purposes of the legislation.

“We were promised it would provide “green jobs” for Americans, but 80% of the $2 billion they spent on alternative energy went to purchase wind turbines built in China!”

At the time, I figured that this was just an accidental or not fully thought-through Facebook post. Little did I know that Sarah Palin was an absolute genius whose Facebook post would spark a mass GOP fair trade wave: virtually every GOP candidate across the country is today campaigning on this loophole in the stimulus bill.

So, what would be the solution to this problem? Well, for starters, we'd have to revisit the procurement commitments in the World Trade Organization (WTO) and other unfair trade deals in order to get even close to 100% true Buy America rules in government spending.

Even many free traders feel very strongly that there are moral, environmental and economic reasons to ensure that our tax dollars are used to support local jobs and production. But, as we've long argued, the WTO closes off this key, sovereign policy space. (See our book "States' Rights and International Trade" for more.) Luckily,

there are a number of both Democrats and GOP that are specifically campaigning on this fair trade sub-theme of reforming procurement rules;

a majority of House Democrats have already signed up to legislation (the TRADE Act) which would bring the procurement provisions of our trade deals up to a fair trade standard; and

But Sarah Palin has pointed out the way forward: rather than falsely assume a bipartisan consensus in favor of Bush's trade deals with Korea and other countries, let's build on the true bipartisan consensus in favor of fair trade in government procurement and in other policy areas.

(Ed note: In the last two election cycles, Public Citizen has brought you detailed analysis of around 100 competitive and open seat congressional races. We found that the role of trade and offshoring increased in 2008 relative to 2006, and by all indications, 2010 will set a new record. Of about 170 races we are tracking, trade is playing in about 90 percent of them (150). That's right, we'll be releasing detailed candidate profiles of over 350 candidates - GOP, Democratic, and some third party.)

Recent polling shows that anger about U.S. job-offshoring and "free trade" has become a powerful election issue nationwide - across stunningly diverse demographics. Once again, Public Citizen's Global Trade Watch is tracking these issues in races across the country. We found trade playing in 150 of the 170 races deemed competitive by the Cook report and in open seats. Many GOP candidates are now also running on fair trade; in a number of races, candidates from both parties are trying to "out fair trade" one another.

...

Intensified emphasis on these issues - and drawing a sharp distinction against those who have supported past job-killing pacts - is proving to be a lifeline in some races.

October 13, 2010

IMF vs. WTO: who is better on financial services regulation?

Last month, the International Monetary Fund (IMF) prepared a "reference note" on trade deals and financial services. The note echoes our own finding that the World Trade Organization's (WTO) General Agreement on Trade in Services (GATS) constrains some regulations, even when they apply to domestic and foreign firms alike. Here are some of the more interesting tidbits from the IMF note:

If a member no longer wishes to conform to its specific commitments, it may modify its schedule by providing compensation in the form of alternative market access (even across sectors). However, this undertaking may involve difficult negotiation and can confuse understandings regarding the member’s commitments. (Page 5)

In the case of challenges by other WTO members on the legality of a specific (prudential) measure adopted by a member, a determination on the consistency of such a measure with the prudential carve-out clause would be made through the WTO dispute settlement mechanism. (Page 5-6)

While capital controls may be considered a legitimate part of the toolkit to manage capital inflows in certain circumstances,13 they may, in some cases, be inconsistent with GATS obligations. Such controls can take various forms, including pricebased measures such as explicit taxes or unremunerated reserve requirements with respect to specific investment vehicles (stocks, bonds, loans), or other measures, such as an outright prohibition against the sale of short-term securities to nonresidents. A country imposing such controls may have commitments under the GATS to allow nonresidents to provide the specific financial service unhindered and thus its underlying capital flows... (page 7)

The original commitments were often limited to the partial “locking in” of policies that had already been implemented on a unilateral basis at the time of the initial services trade negotiations (Uruguay Round, 1986–94).15 In the case of financial services, the relatively high number of commitments (second only to tourism services) is explained by the fact that negotiations were extended well beyond the Uruguay Round end date, and finally concluded in December 1997. While developed countries made more substantial commitments than developing countries,16 reflecting actual openness at the time, in practice, many WTO members have less restrictive policies than implied by their legal bindings; it would be inconsistent with their GATS commitments to apply more restrictive policies (unless justified for prudential reasons). It is nonetheless evident that, under significant external pressure, latecomers—25 emerging markets and low-income WTO accession countries—have made substantial commitments, either binding the sstatus quo or, in some cases, using those commitments to motivate domestic reform programs.... (page 8)

Some PTAs and BITs restrict the use of capital controls during macroeconomic and financial distress and do not provide for a “safeguard” clause. That is, a provision that allows a country to impose capital controls during times of macroeconomic or financial crisis. The absence of a safeguard provision can potentially create problems for the Fund... (page 11)

My main criticism of the IMF note is that it persists with the completely untested notion that the GATS prudential measures defense provision is a "carve-out" and that "governments have considerable leeway in introducing prudential measures that fit their needs." As we show here and here, these common operating assumptions miss the mark.

October 08, 2010

Find Layoffs Caused by Outsourcing and Imports

The Trade Data Center that we launched last week contains so many data products that they can almost be lost in a blur. Right now I’d like to take some time to zoom in and profile the most exciting new data product – the overhauled Trade Adjustment Assistance (TAA) database. The TAA database, available here, tracks specific layoffs that have occurred due to rising imports or outsourcing, as certified by the Department of Labor.

Some readers may be familiar with the TAA database that Public Citizen has maintained for years. Our new database is an overhauled version of this. Whereas the previous database only gave the workplace location in the form of the city and state, you can search the new database by congressional district, county, and metropolitan area! It also gives information about the foreign country implicated in many of the layoffs.

Plus, the new database consolidates the databases of the regular TAA program and the NAFTA-TAA program, which operated between 1994 and 2002, so we can be sure of exactly how many jobs were lost due to imports or outsourcing in a given locality. Take a look at the FAQ on the database or the technical documentation for more information on these topics.

I’ll give a few examples of how to use the database.

Last month, the corporate members of the President’s Export Council released a letter advocating for the passage of the Bush-negotiated Korea, Panama, and Colombia Free Trade Agreements (FTAs), claiming that passage would boost exports. They ignored the fact that the growth of exports to FTA partners has lagged behind exports to other countries, as we showed in our recent report. It is possible that these corporations are pushing for FTAs since it would facilitate the export of American jobs rather than American goods. We can investigate this with the help of the TAA database.

Let’s pick Xerox, one of the corporate members of the President’s Export Council. First, we enter “Xerox” into the “Company” search box.

Uncheck the “Denied Petitions” box under the “Cause” option so that the search results include only layoffs that have been certified by the Department of Labor as occurring due to offshoring or rising imports.

Then click “Search”

The first result is a Xerox copier factory in Webster, NY that laid off 450 workers when it outsourced work to Mexico in 2000. In total, 1613 Xerox workers have been certified under the TAA program. Does Xerox support FTAs because it thinks that it can export more products with FTAs or is it chomping at the bit to outsource more jobs, which the FTAs would facilitate?

You can query the database for all trade-impacted workplaces in a certain geographic area, such as congressional district.

Simply select the state and input the desired district number – with a leading zero if it is a single digit – and it will pull up all the workplaces in that district. Make sure to uncheck the “Denied Petitions” checkbox if you only want the certified workplaces. Let’s pick Connecticut’s 5th district.

There are 79 certifications covering 6,021 laid off workers. Rep. Chris Murphy, who represents Connecticut’s 5th district, should carefully consider becoming a cosponsor of the TRADE Act since unfair trade has been so harmful to his constituents.

Finally, don’t forget to check out our Google map that displays the location of all of the TAA-certified workplaces and gives information about each. Double click a part of the map to zoom into your town and explore how unfair trade has impacted your community.

October 07, 2010

"Nine weeks. Six to eight hours a day in a bicycle seat..."

"... And who knows how many lessons to be learned in conversation over coffee. Or, herbal tea. Organic, fair trade, sustainably harvested, cruelty-free herbal tea." Elizabeth Wynne Johnson on WAMU's Power Breakfast

Yesterday, Global Trade Watch's Senior Field Organizer James Ploeser departed from West Virginia on a 2000+ mile journey by bicycle to the UN Climate Summit in Cancun, Mexico. With freelance organizer friend Jamie Trowbridge, Ploeser's mission is to connect the issue of climate change to economic globalization in order to "weave together a broader story about what it's going to take to really solve the greatest challenge of our generation."

You can find a full transcript of the interview on Power Breakfast here, audio here, and learn more about the Climate Reality tour here.

My passion is "made in America," working to support small businesses, American companies and new American industries. (REPUBLICAN HOUSE CANDIDATE) has pledged to support the free trade agreements with Colombia, Panama, and South Korea and protect the loophole for companies outsourcing American jobs. I have a different approach to give tax breaks for small businesses that hire workers and give tax subsidies for companies that create jobs right here in America.

The other message is:

We have to change Washington. That means eliminating the special deals and tax breaks won by corporate lobbyists for the oil companies and Wall Street. (REPUBLICAN HOUSE CANDIDATE) has pledged to protect the tax cuts for the top two percent and the big tax breaks for companies who export American jobs. I'll take a differ-ent approach with new middle class tax cuts to help small businesses and new American industries create jobs. Let's make our country work for the middle class.

Both messages have a strong fair trade tone. As does the runner-up, third-best message:

My priority is to cut middle class taxes, extend unemployment and health insurance for the unemployed, support new industries that create jobs and end tax breaks for exporting jobs. The economy shows signs of improving. But (REPUBLICAN HOUSE CANDIDATE) wants to go back to the Bush policies that crushed the middle class. They want to give tax breaks to the wealthy and big corporations. We must rebuild the middle class, not go back to the same old policies for Wall Street that cost us 8 million jobs.

Returning to the top two messages, the intensity of the appeal of the first message (which is the most specific about branding Bush's FTAs with Korea, Panama and Colombia by name and in a negative light) is particularly noteworthy.

Among those independents and white seniors surveyed, the first message was more likely than the second to make the voter more likely to vote for the Democrat. Among these demographic groups, plus the "white older women" surveyed, the first message was more likely than the second to make them "much more likely" to vote for the Democrat. Greenberg and Carville identified these groups as the ones Democrats need to reach if they are to survive.

And... all three of the messages were energizing of the Democrats' core base.

Finally, when these messages were turned on their head, i.e. when the hypothetical Democrat was accusing the hypothetical GOP candidate of supporting unfair trade, the tactic was successful in raising doubts about the GOP candidate.

From my initial research, many GOP candidates are also running on fair trade - in a number of races, candidates from both parties are trying to "out fair trade" one another.

October 06, 2010

As Negotiatiors Meet in Brunei This Week, Rep. Wu Calls for TPP to Have a Democracy Clause

"Congressman David Wu sent a letter today to President Obama calling on the president to ensure that all U.S. trade agreements, particularly the Trans-Pacific Partnership (TPP) currently being negotiated, promote democracy and fundamental human rights. The letter highlights the human rights violations that occur in some of the TPP partner countries, such as Brunei, the host country for the current round of talks, and encourages the inclusion of a 'democracy clause' in the TPP agreement to set clear standards on democracy and human rights."

October 01, 2010

Trade Data Center Launched

Today, we launched the Trade Data Center, a new tool for researching and illustrating the impacts of trade policy on local communities. It’s free and contains previously unavailable information that’s packaged in an easy-to-understand, customizable and user-friendly format.

“Whether you are a seasoned trade hand or just beginning to look into globalization, or whether you are for or against fair trade, the Trade Data Center will have something for you. We hope that this will serve as a resource for journalists, policymakers, researchers, students – anyone with an interest in the impact of trade policy. It really is your one-stop-shop, and we’ll be updating it frequently with new features.”